Supreme Court to hear case by San Joaquin Valley raisin farmers

Dissident San Joaquin Valley raisin farmers and their ideological allies will get a shot at attacking a federal farm program, under a case that the U.S. Supreme Court accepted Tuesday.

Bucking the odds, Fresno-area farmers Marvin and Laura Horne succeeded in convincing the high court to hear their challenge to federal handling of the raisin industry. Though the legal questions are complicated, the real-world stakes add up.

"This is a classic David and Goliath confrontation, where the government comes after these small orchardists and farmers," attorney Michael W. McConnell, who's representing the Hornes, said Tuesday. "The fact that the court is taking this case is really indicative that they care about the little guy."

Gary Schulz, the president of the Fresno-based Raisin Administrative Committee, declined to comment Tuesday, citing the ongoing litigation.

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Marketing orders and research and promotion differ, but they often compel private action in several ways. Promotion programs can force individual growers to pay fees for common advertising, while marketing orders can limit individual production and set quality standards.

In prior cases involving products such as beef and San Joaquin Valley tree fruit, dissidents fell short of convincing the Supreme Court to strike down mandatory promotion fees as a violation of the First Amendment. Similar fights have continued in state courts.

The court will hear the case sometime next year.

The raisin marketing order requires "handlers" who process and pack raisins to place part of their product in reserve, with the industry-run Raisin Administrative Committee deciding how much they're to be paid for this set-aside tonnage. Raisin handlers set aside 47 percent of their crop during the 2002-03 season and 30 percent for 2003-04, but they were paid for only part of what they surrendered.

The set-aside raisins may be sold for purposes such as the federal school-lunch program.

The Hornes, who've been producing raisins in Fresno and Madera counties since 1969, grew disillusioned with the regulatory program. They helped organize some 60 growers into the Raisin Valley Farms Marketing Association, which took care of the packing. By identifying themselves as producers rather than as handlers, the group's members reasoned, they were exempt from the set-aside requirement imposed on handlers.

The Obama administration, however, termed this a "scheme" designed to avoid legal requirements, and the Agriculture Department subsequently ordered the Hornes and their coalition to pay more than $650,000 in fees and penalties.

Rejecting the farmers' claims last year, the 9th U.S. Circuit Court of Appeals said the Hornes' argument "is based on an erroneous belief that they have a property right to market their raisins free of regulatory control."

The dissident growers, in turn, call the fees and penalties for failing to meet the set-aside requirement a "taking" of property. Under the Fifth Amendment, takings require just compensation by the government. Ultimately a court will have to decide whether the takings rules apply to the marketing order set-asides for crops such as raisins that come into the government's hands.

The Supreme Court won't decide this question; at least, not yet. Rather, the court essentially will decide when and where the takings claims can be raised. The dissident farmers want the 9th Circuit Court of Appeals to rule on the takings claim, while the government wants the farmers to file a separate lawsuit through the U.S. Court of Federal Claims.